A wave of withdrawals and stock market disruption followed, creating a wide ripple effect.

Yet, by some miracle, one aspect of the economy remained surprisingly unaffected, and that was the housing market - which even showed glimpses of good news.

Namely, the 30-year fixed-rate mortgage rate fell to 6.6% this week, according to Freddie Mac. This marks the first decline after five consecutive weeks of upward thrusts, peaking at 6.73% last week.

In addition, homebuyers who are preparing for another sharp rate hike when the Fed meets again next week may instead find some comfort. After all, the Fed is likely to be more interested in stabilising an economy hit by the recent banking crisis than in curbing inflation in the short term.

This means that mortgage rates may actually fall further.

Aside from interest rates, other "housing market indicators were noticeably stable this week", noted Danielle Hale, Chief Economist at Realtor.com®, in her latest analysis.

While housing optimists have reason to be hopeful, pessimists have reason to be concerned, given the apparent lack of new home sellers entering the market today.

Compared to a year ago, new listings were down 18 per cent for the week ending March 11, marking 36 consecutive weeks of decline. As Hale put it, "the lack of new sellers continues to be a drag on home sales".

However, overall home inventory (including new listings and older homes that have been sitting on the market) continues to rise, up 61 per cent from the same week last year.

"Rather than new sellers driving these increases, it is the longer time on the market that is pushing up the number of homes for sale," noted Hale.

Homeowners who are on the fence about selling their homes may want to take note that the best time to sell is rapidly approaching.

Data from Realtor.com shows that the best week to list a home is April 16-22, when homes receive 16.4 per cent more buyer comments and sell for an average of $48,000 more than they did earlier this year.

With the usually busy spring season approaching, the direction of the market could depend on whether the Federal Reserve raises interest rates next week.

"Slightly lower interest rates, including mortgages, usually boost home sales," Hale said.

However, Hale also noted that even if interest rates fall, some sellers who may have considered jumping into the spring home buying season may pull back, as an economy in flux could erode overall consumer confidence.

As a result, for now, the market remains in a stable holding pattern.

"Mortgage rates are an important factor in determining the direction of home prices," says Hale." And the outlook for mortgage rates has become quite murky."